Keller Group Plc · LSE:KLR
Keller — FY2012 Earnings Presentation
37 slides from Keller's earnings presentation, March 2013
Slide 1: Keller Group plc Full Year Results 2012
Keller Group plc Full Year Results 2012 March 2013
Slide 2: Highlights
Highlights • Record revenue of £1,317.5m (2011: £1,154.3m), up 14% • Profit before tax doubled to £43.5m (2011: £21.9m) • Business improvement initiatives yielding good results • Earnings per share of 45.9p (2011: 24.8p) • Strong cash generation – year-end net debt of £51.2m (2011: £102.5m) – repres
Slide 3: Group Income Statement
Group Income Statement £m 2012 2011 %change Revenue up 16% on a constant currency basis Revenue 1,317.5 1,154.3 +14% EBITDA 91.9 71.4 +29% Average exchange rates: Operating profit 48.3 28.9 +67% - US$1.58 (2011: US$1.60) Net finance costs (4.8) (7.0) - €1.23 (2011: €1.15) - S$1.98 (2011: S$2.01) Pro
Slide 4: Operating Profit & Margin
Operating Profit & Margin 2012 2011 Constant currency Op Op revenues up 16% £m Revenue Profit Margin Revenue Profit Margin − N America +22% − EMEA -0.3% N America 581.9 32.0 5.5% 471.1 12.0 2.5% − Asia +52% EMEA 358.6 2.2 0.6% 384.8 8.4 2.2% − Australia +15% Asia 118.6 9.5 8.0% 76.7 6.0 7.8% Austral
Slide 5: Group Balance Sheet
Group Balance Sheet £m 2012 2011 Year-end exchange Goodwill/intangibles 97.2 100.6 rates: Property, plant & equipment 248.5 266.1 − US$1.62 (2011: US$1.55) Other non-current assets 14.9 15.8 − €1.22 (2011: €1.19) − S$1.98 (2011: S$2.00) 360.6 382.5 − A$1.56 (2011: A$1.52) Inventories 41.3 37.3 Recei
Slide 6: Group Cash Flow Statement
Group Cash Flow Statement £m 2012 2011 Cash from operations Cash generated from operations 108.4 54.8 118% of EBITDA (2011: 77%) Capex – net (32.7) (37.4) Interest (4.1) (5.1) Tax (10.7) (3.8) Free cash flow 60.9 8.5 Acquisitions - (0.2) Dividends (15.4) (15.8) Other 1.7 - Net cash flow 47.2 (7.5) O
Slide 7: Group Financing Position
Group Financing Position • Over £250m of committed facilities, mainly: Key Financial Covenants – £170m bank facility expiring April 2015 Test Status* – US$70m private placement, payable October 2014 – US$40m private placement, payable August 2018 Net debt < 3x EBITDA 0.8x • Comfortably within all fi
Slide 8: Group Order Intake
Group Order Intake Monthly orders Recent order intake at £m (rolling 3 month average at constant currency*) healthy levels 160 Wheatstone; Vale; Gdansk 140 Crossrail; Victoria 120 station; AP LNG MOF No major (>£20m) 100 projects awarded in H2 2012 80 60 40 Excluding work over a year 20 out, order b
Slide 9: 2013 Guidance
2013 Guidance • Major projects unlikely to repeat at the same level in 2013 • Business improvement initiatives will deliver margin benefit • Usual seasonal H2 bias • Expected effective tax rate of 31% • Capex to be around £40m 8
Slide 10: Group Revenue by End Market
Group Revenue by End Market 2012 Revenue by End Market 2011 Revenue by End Market Keller operates across all Total revenue £1,318m Total revenue £1,154m sectors of the construction industry 17% 17% Infrastructure/Public 40% 14% 14% Buildings the largest sector 51% 18% Significant increase in 29% Pow
Slide 11: US Non-residential Construction Market
US Non-residential Construction Market $bn US Construction Put-in-Place Total US non-residential market 400 up 6% in 2012 (2% down in 2011) - private up 15%, public down 2% 350 300 Infrastructure/Public Buildings flat 250 following two years of decline 200 Office/Commercial up 7% 150 - privately fun
Slide 12: North America Revenue by End Market
North America Revenue by End Market 2012 Revenue by End Market 2011 Revenue by End Market Infrastructure/Public Total revenue $919m Total revenue $754m Buildings less dominant - down from 50% in 2010 24% 20% Power/Industrial very robust 41% - Power represents more 45% 13% than half 11% Office/Commer
Slide 13: North America - Foundations
North America - Foundations Revenue up 20% Margin improved to 5.9% (2011: 3.2%) - business refocusing - targeting of growth segments Good results from transmission-line projects - revenue up to c.$75m (2011: < $10m) Pick-up in Miami market benefits HJ Further organic growth in Canada Piling, condomi
Slide 14: Geo-Foundations
Geo-Foundations Toronto-based geotechnical specialist, acquired Jan 2013 Design-build solutions across the construction market - principally serves eastern Canada Offers micro-piling, ground anchors, specialty grouting services - still relatively new techniques in Canadian market Increasing market a
Slide 15: North America Case Studies
North America Case Studies Piling, transmission line project Post-tension slab on grade New Jersey, USA Texas, USA 14
Slide 16: North America - Suncoast
North America - Suncoast US Housing Starts (000s) US housing starts 000s continue to improve 2500 − still well below long term norm 2000 1500 1000 500 0 Source: US Census Bureau Housing Starts 15
Slide 17: North America - Suncoast
North America - Suncoast 000s $m 3000 300 Much improved outcome at Suncoast 2500 250 - revenue up 35% - return to profit after five years 2000 200 Steady increase in 1500 150 production 1000 100 Reaping rewards of earlier restructuring 500 50 - significantly lower cost base 0 0 - improved operationa
Slide 18: EMEA Regional Split
EMEA¹ Regional Split 2012 Revenue by Region 2011 Revenue by Region Over half of revenue from Total revenue €441m Total revenue €443m Germany, Poland and UK 19% 14% 21% Southern European 19% 5% markets distressed 4% - France/Spain now only 8% 6% 18% 17% 12% (2007: 29%) 8% 10% 9% 11% Middle East still
Slide 19: EMEA Highlights
EMEA Highlights Cost reductions and efficiency improvement measures - first-half loss converted to full-year profit Good progress on large infrastructure projects - Gdansk Tunnel - Victoria Station - Crossrail Well executed first project in Turkey Vibro replacement, gas plant Middle East now startin
Slide 20: EMEA Case Studies
EMEA Case Studies Excavated TBM chamber, road tunnel Specialty grouting, Victoria Station Upgrade Gdansk, Poland London, UK 19
Slide 21: Asia Regional Split
Asia Regional Split 2012 Revenue by Country 2011 Revenue by Country Malaysia share up to 27% Total revenue S$235m Total revenue S$154m (2011: 18%) - strong contribution from 12%1% 15% 2% Vale contract 27% 18% India share reduced, 60% reflecting general 65% economic slowdown - consolidation likely in
Slide 22: Asia Highlights
Asia Highlights Excellent result from Malaysia - first piling contract in Malaysia (Vale) successfully completed - second large piling contract now underway Much improved result from Resource Piling - greater co-operation with other Keller companies First large job won in Hong Kong for many years In
Slide 23: Australia Highlights
Australia Highlights Best-ever year for Waterways - excellent performance on APLNG MOF - demonstrates value added from acquisitions Piling Contractors back in profit Iron-ore related projects setback; coal and LNG unaffected Off-shore piling, materials offloading facility Queensland, Australia 22
Slide 24: Australia – Wheatstone
Australia – Wheatstone A$180m contract for on-shore piling supply and installation Repetitive piling process, but with challenging logistics - remote site with difficult climatic conditions - major steel tube supply from Korea Successful test piling complete and major supply contracts awarded Testin
Slide 25: Business Improvement Initiatives
Business Improvement Initiatives • Three major business improvement initiatives announced last year – increasing our revenue and profit from large projects – further improvement of the Group’s risk management – accelerating our global transfer of technologies • Additional focus on regional initiativ
Slide 26: Business Improvement Initiatives - Progress
Business Improvement Initiatives - Progress • More revenue and profit from large projects than ever before • Refreshed risk management processes – fewer poorly-performing contracts – improvement in the Group’s operating margin • Introduced piling into Brazil and Malaysia • Transferred more plant and
Slide 27: Outlook
Outlook • Varied economic conditions expected across our global markets – North America – continued strengthening, building on residential recovery – Europe – recovery unlikely in the near term – good opportunities in Australia and Asia • Contract awards remain at a healthy level – order book at end
Slide 28: Appendix
Appendix
Slide 29: Introduction to Keller
Introduction to Keller • The world’s largest independent ground engineering contractor – ground engineering is a small, niche sub-sector of construction – growing faster than construction, reflecting: − more pressure to build on brownfield and marginal land − more ambitious development and infrastru
Slide 30: Ground Engineering Worldwide
Ground Engineering Worldwide % of 2012 Activities revenue Regions of use Applications Piling 44% North America/UK Foundation support Eastern Europe Earth retention Middle East Asia & Australia Ground improvement 22% North America Foundation support EMEA Seismic risk protection Asia Australia Special
Slide 31: History of Keller
History of Keller 1958 1960’s 1974 1984 1990 1994 2001 2002 2006 2007 2008 2009 2010 2013 NOW Acquired Phi Acquired Est. 1958 Acquired Management Acquired (UK) Resource Acquired Johann Keller Acquired Geo-Foundations Ground test buyout from Suncoast Piling in Germany Systems Contractors Inc services
Slide 32: Strategy
Strategy • Our Objective – to extend our global leadership in specialist ground engineering through: – organic growth, particularly in developing markets – targeted acquisitions • Our Execution – transfer of technologies and techniques within our current geographic regions – offering design and buil
Slide 33: Ten Year Track Record
Ten Year Track Record £m Revenue 2003 – 2012 1400 (Continuing Operations) 1,317.5 1,196.6 1200 1,154.3 1,068.9 1,037.9 1000 955.1 857.7 800 685.2 600 526.2 505.4 400 200 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 North America EMEA Asia Australia 32
Slide 34: Ten Year Track Record
Ten Year Track Record £m Operating Profit 2003 – 2012 (Continuing Operations) 140 119.4 120 107.4 100 89.3 77.3 80 55.3 60 48.3 43.3 40 33.8 * 33.4 28.9 20 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 -20 Head Office Costs North America EMEA Asia Australia *pre-exceptionals 33
Slide 35: Operating Margin Trend
Operating Margin Trend Operating margin* Operating margin 12% recovering from 10% Through the historic low cycle margin 8% 6% 4% 2% 0% 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 *pre-exceptionals and from continuing operations 34
Slide 36: Dividend
Dividend Dividend per share (pence) Dividend increased every 25 year since 1994 flotation until 20 2011 15 10 5 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 35
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